Amazon Revolutionizing Door-to-Door Delivery Service

Chances are, if you bought someone a gift for the holidays, you may have done it by means of online shopping. Amazon is probably the best online shopping companies out there, particularly if you enjoy their Amazon Prime services.

Amazon is not a company that does things the good old-fashioned way and now, they are tackling home delivery with an innovative approach. During the 2013 Christmas season, Amazon’s deliveries got bogged down because of bad forecasting by third-party parcel delivering services, like UPS and FedEx and due to severe weather.

A good chunk of consumer orders for Christmas were delivered after the holiday. This was the catalyst for Amazon to invest in an internal delivery service. The company is extremely secretive about its plans, but there have been some notable developments.

New Strategies
Amazon is breaking boundaries with its Prime Now service, a one-hour or same-day deliveries options, offered in certain metropolitan areas. To reach these goals, it has moved away from large, out-of-state delivery centers, to opening a network of mid-size distribution centers within cities and closer to their consumers. These “sortation centers” are the in-between step among mega-centers and local delivery options.

The company has also hired hundreds of on-demand delivery drivers in each city where it is offering its Prime Now service. The hiring process has been tasked with delivering a flexible team. The drivers must have their own vehicles and be willing to work flexible hours.

Thousands of truck trailers have also been purchased by Amazon, giving them a large, internal fleet for deliveries for the first time in its history. The trucks will be most likely used to transport goods from the mega distribution warehouses to the smaller “sortation centers”.

And who hasn’t heard about Amazon’s testing of drones for delivering parcels. You can bet the company will push hard to get regulatory approval to use these advanced mechanical devices, adding another weapon to an already potent delivery arsenal.

All these strategies underline the control Amazon is taking in ensuring its products are delivered on time. After, the 2013 holiday season delivery crisis, Amazon cut down reliance on its largest delivery partners, UPS and FedEx.

A New Business Segment
Amazon has a history of branching out into different industries. A prime example is Amazon Web Services business, which created shockwaves in that industry because of their pricing and service options.

Analysts believe the knowledge Amazon will gain from delivering parcels will eventually give it a competitive edge and the company could launch a full-fledged door-to-door delivery service to rival the likes of FedEx and UPS.

Why not leverage all this infrastructure and technical knowledge? Amazon already has some of the most stringent delivery requirements, so it would be well suited to provide delivery services to other companies. It would only be the next logical step in their delivery progression, especially since the industry has taken a drastic turn in the last decade and the old players are still learning how to cope with their new reality.

In the past, delivery services focused on delivering a large number of packages to a small number of locations. Now, the industry has to deliver single packages to a large number of households. This has increased the delivery cost per package and to keep expenses in check, the traditional players in this field are pushing customers to wait a bit longer to receive their parcels. This would allow the companies to add up deliveries to make a single cost-effective trip.

Amazon, on the other hand, is pushing almost instant (one-hour) deliveries, which, we know for the most part, will be single deliveries. They are set to change the world of door-to-door package deliveries.




join the supply chain geek network